Quarterly Report • Oct 25, 2011
Quarterly Report
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Net Insight AB [publ] Corporate Reg. No 556533-4397
Net Insight AB discloses the information provided herein pursuant to the Securities Market Act and/ or the Financial Instruments Trading Act. The information was submitted for publication on October 25, 2011 at 08.30 am CET.
Our third quarter revenue reached SEK 75.4 million (67.6) which is 11 % above same quarter previous year. Currency adjusted the revenue growth amounted to 2%. The gross margin was strong at 65.8 % (61.1) and also the operating margin was higher and reached 20,6 % (13,7). Stronger margins and improved finance net produced a net income before tax of SEK 17 million (9.6). The increased profitability is driven by good underlying margins, cost control and a positive currency effect of SEK 2.4 million. The cash flow was positive and our net cash position increased by SEK 4.8 million to SEK 195.4 million.
On top of steady and profitable repeat business during the quarter we also had some important new customer wins. We won a contract exceeding SEK 20 million with a member of the German ARD Group of Broadcasters for a strategically important extension of their contribution network. Following a successful event related project in Asia we secured a contract for the build out of a contribution network with a major operator in China. Via a new partner in Italy we won a project with Telecom Italia Media Broadcasting (TIMB), which is a major terrestrial television network operator in Italy, including our video compression solution.
Our EMEA region has contributed with 69 % (84) of the total revenues. The Americas contributed 22 % (10) and APAC 9 % (6). Both Americas and APAC are performing better than last year which is a step in the right direction.
Our partner network is a strategic pillar for our market expansion and an increasingly important business generator. Our focus going forward is increased revenue generated per partner before possibly adding new ones. Indirect sales through partners will vary over time and during the quarter reached the highest level so far 65 % (46).
We have recently expanded our product portfolio. With the new product releases we strengthen our access portfolio so that customers can use the Nimbra platform from the core all the way to the network access. In front of customers it is important to have a sufficiently large product span and we have now increased that span significantly and thereby expanded our addressable market. At the same time this is a new attractive offering and facilitates new entry point business for our partners.
Net Insight has also been awarded "Best HDTV Technology Project" by Cable and Satellite International for our successful Digital Terrestrial (DVB-T2) project with Teracom in Sweden.
As regards the period January to September revenues, gross margin and net income are up compared with previous year.
Stockholm, October 25, 2011 Fredrik Trägårdh CEO
Net Insight had a steady repeat business during the quarter and the Business Area Broadcast and Media represented 89% of total revenue. The Business Area Digital Terrestrial TV represented 9% and CATV/IPTV 2%. The DTT-business is dependent on DTT-roll-outs and will therefore fluctuate over time.
Net Insight received one of our most important orders this year from a major new German customer investing in a contribution network. This new customer has purchased Net Insight's Nimbra Platform for contribution of video, radio and data between its headquarters and to more than 15 sites in Germany. This order confirms our position in the European market. Net insight has a long history of success in live contribution for sporting events and recently Net Insight's Nimbra platform was chosen for live production feeds for IAAF Athletic World Championships in Korea. Earlier this year Net Insight's Nimbra platform supported the 2011 FIS Alpine World Ski Championship in Germany, the FINA World Championships in China as well as the Rugby World Cup in New Zealand.
The Net Insight ambition is to grow our business in China and in the beginning of September an order from a major Chinese cable operator was announced and won in partnership with Times Sage Technology (TST), member of the CSS group. This order is of importance to Net Insight since it is the second phase of deployment to provide inter-regional media transport.
An increasing part of Net Insight's revenues comes from Service Providers entering the media-rich segment to sell services and Net Insight's focus on the Service Providers will give Net Insight the opportunity to reach the low-end media access market in an efficient way, and to expand into new market segments. An Italian service provider and a new customer of Net Insight, Telecom Italia Media Broadcasting (TIMB), has chosen the NImbra platform. The company is a major terrestrial television network operator who operates, manages and develops transmission networks through which group-owned and third parties' digital and analog television channels are broadcasted all over the Italian territory.
Two new solution partnerships were announced during the third quarter of 2011 related to network management. Net Insight's partnership with Dimetis brings considerable value to the Net Insight offering and to our customers by enabling scheduling and booking of Nimbra network resources for on-demand services. The Skyline partnership provides Net Insight customers with additional support of advanced applications for automation, scheduling, event correlation and reporting. In regards to our Global Partner Network one new reseller, Brilliantel, South Africa, was signed during the third quarter and at the end of the quarter Net Insight had 49 partners.
During the third quarter our key marketing focus has been our participation at the IBC Show 2011 in Amsterdam, Netherlands. IBC is a leading exhibition for professionals engaged in the creation, management and delivery of entertainment and media content worldwide. In conjunction with the IBC 2011 Net Insight launched several new products and received much publicity around our live demonstration of next generation remote production significantly reducing cost of event production. Net Insight demonstrated a remote production solution together with TeliaSonera International Carrier exemplifying how real-time media networks can be utilized to revolutionize the outside broadcasting. Net Insight also received the CSI Award for the Best HDTV Technology project based on the Teracom (Sweden) project announced in May 2010. Net Insight launched our value proposition around Service Aware Media Networks and the Nimbra platform with its unique MSR (Media Switch Router) functionality enabling network owners to deliver 100% Quality of Service and service integrity in IP media networks as well as enhancing the performance of the IP networks. All these activities generated good media coverage in media and broadcast trade magazines.
Net Insight also participated in SET Broadcast and Cable in Sao Paulo, Brazil. The exhibition is the major event for Television, Radio and Telecommunications Engineering in Latin America. Together with our sales partners we have also participated in trade shows in South Africa, Australia and China.
New series of the Nimbra platform were launched in conjunction with IBC 2011 aimed for the network access market. The Nimbra 140 series provides optical solutions for studios, play-out centers, remote production facilities and affiliates. The Nimbra 230 was also launched and is the first all Ethernet switch solution from Net Insight enabling network operators to further expand their network into the Ethernet access segment, in a very cost efficient way, and with access to a large toolbox of advanced Ethernet functionality. The Nimbra 320 is a compact one-box access solution for true multi-service transport of media and data services, targeting the increasing demands for transport of real-time sensitive media and data applications with guaranteed QoS. Net Insight also launched the 10GE Trunk Module for Nimbra 600 which enables multiservice QoS transport of native video, audio and IP services over high capacity IP/MPLS/Ethernet infrastructure, for demanding media and broadcasting applications.
No significant events have occurred after the end of the period.
Net Sales for the third quarter amounted to SEK 75.4 million (67.6), which represents a growth of 11.5%. Revaluation of accounts receivables in foreign currencies had a positive effect on Net Sales of SEK 2.4 million compared to SEK -5.9 million for the same period last year.
In comparable currencies the growth amounts to 2%.
The EMEA region accounted for SEK 51.8 million (56.6) of total sales. The Americas showed growth of SEK 9.8 million to SEK 16.8 million (7.0) and APAC is up compared with previous year to SEK 6.8 million (4.0).
| Q3 | Q3 | Q4 | Q1 | Q2 | Q4'10 - | Full year | |
|---|---|---|---|---|---|---|---|
| Amount in SEK million | 2011 | 2010 | 2010 | 2011 | 2011 | - Q3'11 | 2010 |
| EMEA | 51,8 | 56,6 | 80,1 | 50,3 | 45,1 | 227,3 | 229,2 |
| Americas | 16,8 | 7 | 6,2 | 13,2 | 21,8 | 58,0 | 43,8 |
| APAC | 6,8 | 4,0 | 1,8 | 3,1 | 5,3 | 17,0 | 14,7 |
| Totalt | 75,4 | 67,6 | 88,1 | 66,6 | 72,2 | 302,3 | 287,7 |
Sales in the Broadcast & Media business area made up 89% (68) of total sales due to temporary changes in business. DTT & Mobile TV accounted for 9% (30) and IPTV/CATV for 2% (2).
Hardware revenue is slightly down to SEK 55.0 million (56.9). Sales of software licenses are stable on SEK 6.5 million (6.6) whereas support and service revenue has increased compared to previous year to SEK 10.2 million (9.8).
As shown in the condensed income statement on page 11, the gross margin is 65.9% (61.1). The strong gross margin is primarily connected to strengthened foreign currencies.
Total operating expenses for the third quarter is slightly up to SEK 34.1 million (32.1). Sales and marketing expenses are stable at SEK 22.5 million. Administrative expenses are higher mainly as more external services have been engaged in the period, SEK 7.2 (4.8) million. R&D expenses show a decrease of SEK 0.5 million compared to last.
Operating earnings for the third quarter amounted to SEK 15.5 million (9.2), which corresponds to an Operating Margin of 20.6% (13.7)
The financial net amounted to SEK 1.5 million (0.3) as a result of increased interest rates.
Earnings before tax amounted to SEK 17.0 million (9.6), which corresponds to a profit margin of 22.6% (14.2).
Net Income amounted to SEK 14.3 million (11.1) resulting in a Net Profit margin of 19.0% (16.4).
Net Sales for the nine months period ending September 30th, amounted to SEK 214.2 million (199.6), which is an improvement of 7.3% over last year. Revaluation of the accounts receivables stock had a positive effect on Net Sales for the first nine months of SEK 2.5 million (-7.3).
In comparable currencies the growth amounts to 8%.
The EMEA region accounted for SEK 147.2 million (148.9), Americas SEK 51.8 million (38.0) and APAC SEK 15.2 million (12.7).
Sales by business area are distributed between Broadcast & Media 73% (70), DTT & Mobile TV 22% (28) and IPTV/CATV 5% (2).
Hardware sales amounted to SEK 150.8 million (152.7), software licenses SEK 20.2 million (21.0) and support and services revenue SEK 32.6 million (30.2).
As shown in the condensed income statement on page 11, the Gross margin is 61.8% (64.4).
Operating earnings amounted to SEK 26.7 million (27.4), which correspond to an Operating Margin of 12.5% (13.7).
The financial net was positive at SEK 3.8 million (-0.1).
Earnings before tax amounted to SEK 30.6 million (27.3) and the corresponding profit margin amount to 14.3% (13.7)
Net Income amounted to SEK 28.4 million (83.8). The transaction, announced in Q1 2010, whereby Net Insights intellectual property rights are moved to a new wholly owned limited liability company gave a positive tax and cash effect of approximately SEK 60 million during 2010.
Cash flow from ongoing operations in the third quarter amounted to SEK 20.9 million (8.5). Cash flow from ongoing operations before changes in working capital was positive, SEK 24.5 million (15.0). Changes in working capital affected cash flow negative, SEK -3.7 million (-6.5). Also the investment activity was negative, SEK -16.1 million (-12.6) due to increased capitalization of development. Third quarter cash flow amount to SEK 4.8 million (-4.2) and liquid funds at the end of the period totaled SEK 195.4 million (204.3).
Cash flow from ongoing operations for the nine month period amounted to SEK 8.0 million (31.2). The cash flow from ongoing operations before changes in working capital was 51.9, SEK million (46.8). Changes in working capital affected cash flow negative for the period SEK, -43.8 million (-15.6). The investment activity was negative SEK -48.5 million (21.1). Last year's positive cash flow was generated from the first quarter IPR transaction which gave a cash surplus of around SEK 60 million. Total cash flow for the nine month period amounted to SEK -40.5 million (52.3).
Shareholders' equity amounted to SEK 469.9 million (420.8) with a resulting equity ratio of 86.8% (84.2).
Third quarter investments in tangible assets amounted to SEK 1.8 million (0.0) and depreciation of tangible assets amounted to SEK 0.3 million (0.2). Capitalization of development expenditures totaled SEK 14.2 million (12.4). Depreciation of capitalized development expenditures totaled SEK 6.7 million (6.1).
Investments in tangible assets for the nine months period amounted to SEK 2.8 million (0.2) and depreciation of tangible assets amounted to SEK 0.7 million (0.8). Capitalization of development expenditures totaled SEK 45.7 million (37.8). Depreciation of capitalized development expenditures totaled SEK 19.9 million (17.2).
At the end of the period, net book value of capitalized development expenditures amounted to SEK 147.5 million (115.9).
At the end of the period Net Insight had 146 (133) employees. The parent company Net Insight AB had 137 (124) employees, Net Insight Intellectual Property AB had 4 (4) employee and the US subsidiary Net Insight Inc. had 5 (5) employees.
The parent company's net sales during the third quarter were SEK 94.5 million (87.1). Net income amounted to SEK 15.1 million (21.4).
For the nine month period ending September 30th, the net sales were SEK 277.7 (243.1) and the Net income amounted to 36.9 (213.0). Liquid funds amounted to SEK 130.6 million (135.1).
Remaining tax losses carried forward amount to SEK 163 million.
Net Insight's operation and results are impacted by a number of external and internal factors. A continuous process identifies existing risks and assesses how each risk shall be managed and mitigated.
The risks to which, the company are exposed are divided into market related risks (including competition, technology development, political risks), operational risks (including product reliability, intellectual property rights, litigation, and customer dependence) and financial risks (including predominately currency exposure).
No additional significant risks or uncertainties than those described in the annual report 2010 have developed in the third quarter.
For a complete description of the Company's risk analysis and risk management, see page 26 and 44 in the 2010 Annual report.
| Q3 | Q3 | Jan-Sep | Jan-Sep Q4'10-Q3'11 | Fully year | ||
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2011 | 2010 | 2011 | 2010 | 12 months | 2010 |
| Net sales | 75 367 | 67 644 | 214 221 | 199 638 | 302 281 | 287 698 |
| Cost of goods & service sold | -25 760 | -26 323 | -81 855 | -71 099 | -117 924 | -107 168 |
| Gross earnings | 49 607 | 41 321 | 132 366 | 128 539 | 188 816 | 180 530 |
| Sales and marketing expenses | -22 452 | -22 344 | -66 787 | -70 480 | -91 350 | -95 043 |
| Administration expenses | -7 234 | -4 827 | -22 462 | -15 105 | -27 614 | -20 257 |
| Development expenses | -4 424 | -4 914 | -16 391 | -15 594 | -22 943 | -22 146 |
| Operating earnings | 15 497 | 9 236 | 26 726 | 27 360 | 42 450 | 43 084 |
| Net financial items | 1 511 | 344 | 3 842 | -95 | 4 411 | 474 |
| Earnings before tax | 17 008 | 9 580 | 30 568 | 27 265 | 46 861 | 43 558 |
| Tax | -2 659 | 1 490 | -2 148 | 56 531 | 566 | 59 245 |
| Net income | 14 349 | 11 070 | 28 420 | 83 796 | 47 427 | 102 803 |
| Net income for the period attributable to the stockholders of | ||||||
| the parent company | 14 349 | 11 070 | 28 420 | 83 796 | 47 427 | 102 803 |
| Earnings per share before dilution | 0,04 | 0,03 | 0,07 | 0,21 | 0,11 | 0,26 |
|---|---|---|---|---|---|---|
| Earnings per share after dilution | 0,04 | 0,03 | 0,07 | 0,21 | 0,11 | 0,26 |
| Average number of shares in thousands before dilution | 389 933 | 389 933 | 389 933 | 389 933 | 389 933 | 389 933 |
| Average number of shares in thousands after dilution | 389 933 | 389 933 | 389 933 | 389 933 | 389 933 | 389 933 |
| Amount in SEK thousands | |||||||||
|---|---|---|---|---|---|---|---|---|---|
| Net income | 14 349 | 11 070 | 28 420 | 83 796 | 47 427 | 102 803 | |||
| Other comprehensive income | |||||||||
| Exchange rate differences | 60 | -1 024 | 69 | -476 | 134 | -411 | |||
| Total other comprehensive income, net after tax | 60 | -1 024 | 69 | -476 | 134 | -411 | |||
| Total comprehensive income for the period Total comprehensive income for the period attributable to the |
14 409 | 10 046 | 28 489 | 83 320 | 47 561 | 102 392 | |||
| stockholders of the parent company | 14 409 | 10 046 | 28 489 | 83 320 | 47 561 | 102 392 |
| Q3 | Q3 Jan - Sept Jan - Sept Full year |
||||
|---|---|---|---|---|---|
| 2011 | 2010 | 2011 | 2010 | 2010 | |
| Return on equity before tax (%) | 3,6 | 2,3 | 6,5 | 6,5 | 9,9 |
| Equity per share (SEK) | 1,2 | 1,1 | 1,1 | ||
| Cash flow from ongoing operations per share (SEK) | 0,06 | 0,04 | 0,20 | 0,12 | 0,19 |
| Q3 | Q3 | Jan-Sep | Jan-Sep Q4'10-Q3'11 | Full year | ||
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2011 | 2010 | 2011 | 2010 | 12 mths | 2010 |
| Ongoing operations | ||||||
| Net income before tax | 17 008 | 9 580 | 30 568 | 27 265 | 46 861 | 43 558 |
| Depreciation | 7 213 | 6 555 | 21 260 | 18 688 | 27 737 | 25 165 |
| Other items not affecting liquidity | 320 | -1 124 | 45 | 798 | 3 538 | 4 291 |
| Cash flow from ongoing operations | ||||||
| before change in working capital | 24 541 | 15 011 | 51 873 | 46 751 | 78 136 | 73 014 |
| Change in working capital | ||||||
| Increase-/decrease+ in inventories | 4 014 | -25 | -8 499 | 1 775 | -11 832 | -1 558 |
| Increase-/decrease+ in receivables | -6 703 | -5 420 | -13 788 | -24 130 | -2 055 | -12 397 |
| Increase+/decrease- in current liabilities | -993 | -1 075 | -21 558 | 6 761 | -9 620 | 18 699 |
| Cash flow from ongoing operations | 20 859 | 8 491 | 8 028 | 31 157 | 54 629 | 77 758 |
| Investment activity | ||||||
| Acquisitions of intangible fixed assets | -14 260 | -12 671 | -45 724 | -38 523 | -60 490 | -53 289 |
| Acquisitions of tangible fixed assets | -1 779 | 0 | -2 796 | -236 | -3 056 | -496 |
| Acquistion of net assets | 0 | 0 | 0 | 59 990 | 0 | 59 990 |
| Increase-/decrease+ in long-term receivables | -11 | 28 | 13 | -117 | 25 | -105 |
| Cash flow from investment activity | -16 050 | -12 643 | -48 507 | 21 114 | -63 521 | 6 100 |
| Increase/decrease in liquid funds | 4 809 | -4 152 | -40 479 | 52 271 | -8 892 | 83 858 |
| Liquid funds, opening balance | 190 569 | 208 422 | 235 857 | 151 999 | 208 422 | 151 999 |
| Liquid funds, closing balance | 195 378 | 204 270 | 195 378 | 204 270 | 199 530 | 235 857 |
| Amount in SEK thousands | Sep 30 2011 Sep 30 2010 Dec 31 2010 | ||
|---|---|---|---|
| ASSETS | |||
| Intangible assets | |||
| Capitalized expenditure for development | 147 457 | 115 893 | 121 600 |
| Goodw ill | 4 354 | 4 354 | 4 354 |
| Other intangible assets | 1 507 | 2 372 | 2 156 |
| Tangible fixed assets | |||
| Equipment | 3 754 | 1 702 | 1 702 |
| Equipment for leasing | 0 | 238 | 0 |
| Financial assets | |||
| Deferred tax asset | 26 926 | 26 361 | 29 075 |
| Deposits paid, long-term | 340 | 365 | 353 |
| Total fixed assets | 184 338 | 151 285 | 159 239 |
| Current assets | |||
| Inventory | 37 123 | 24 894 | 28 228 |
| Customer receivables | 111 166 | 109 046 | 98 430 |
| Other receivables | 11 719 | 10 151 | 9 034 |
| Cash and bank balances | 195 378 | 204 270 | 235 857 |
| Total current assets | 355 386 | 348 361 | 371 549 |
| Total assets | 539 724 | 499 646 | 530 788 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 597 | 15 597 |
| Other contributed capital | 1 192 727 | 1 192 727 | 1 192 727 |
| Translation difference | -1 590 | -1 724 | -1 659 |
| Accumulated deficit | -736 865 | -785 778 | -766 091 |
| Total shareholders' equity | 469 869 | 420 822 | 440 574 |
| Long-term liabilities | |||
| Long-term liabilities | 0 | 229 | 0 |
| Provisions | 6 202 | 6 856 | 5 001 |
| Total long-term liabilities | 6 202 | 7 085 | 5 001 |
| Current liabilities | |||
| Accounts payable | 14 878 | 26 258 | 32 719 |
| Other liabilities | 48 775 | 45 481 | 52 494 |
| Total current liabilities | 63 653 | 71 739 | 85 213 |
| Total liabilities and equity | 539 724 | 499 646 | 530 788 |
| Other | ||||||||
|---|---|---|---|---|---|---|---|---|
| Share | contributed | Translation | Accumulated | Total shareholders' |
||||
| Amount in SEK thousands | capital | capital | difference | deficit | equity | |||
| 2010-01-01 | 15 597 | 1 192 727 | -1 248 | -871 843 | 335 233 | |||
| Total comprehensive income | 0 | 0 | -476 | 83 796 | 83 320 | |||
| Employee stock option program: | ||||||||
| Value of employees' services | 0 | 0 | 0 | 2 268 | 2 268 | |||
| 2010-09-30 | 15 597 | 1 192 727 | -1 724 | -785 779 | 420 821 | |||
| 2010-10-01 | ||||||||
| Total comprehensive income | 0 | 0 | 65 | 19 007 | 19 072 | |||
| Employee stock option program: | ||||||||
| Value of employees' services | 0 | 0 | 0 | 681 | 681 | |||
| 2010-12-31 | 15 597 | 1 192 727 | -1 659 | -766 091 | 440 574 | |||
| 2011-01-01 | 15 597 | 1 192 727 | -1 659 | -766 091 | 440 574 | |||
| Total comprehensive income | 0 | 0 | 69 | 28 420 | 28 489 | |||
| Employee stock option program: | ||||||||
| Value of employees' services | 0 | 0 | 0 | 806 | 806 | |||
| 2011-09-30 | 15 597 | 1 192 727 | -1 590 | -736 865 | 469 869 |
| Q3 2011 | Q3 2010 | |||||||
|---|---|---|---|---|---|---|---|---|
| Amount in SEK million | EMEA | APAC | AM | Total | EMEA | APAC | AM | Total |
| Net Sales | 52 | 7 | 17 | 75 | 57 | 4 | 7 | 68 |
| Regional Contribution | 20 | 0 | 8 | 27 | 17 | 0 | 2 | 19 |
| Regional Contribution (%) | 38% | -7% | 49% | 36% | 31% | -6% | 25% | 28% |
| Adjusted for R&D Depreciation | 5 | 1 | 1 | 7 | 5 | 0 | 1 | 6 |
| Adjusted Regional Contribution | 25 | 1 | 9 | 34 | 23 | 0 | 2 | 25 |
| Adjusted Regional Contribution (%) | 47% | 8% | 55% | 46% | 40% | 3% | 34% | 37% |
Regional Contribution is defined as Gross earnings less Sales and Marketing expenses. AM is short for Americas.
| Jan-Sep | Jan-Sep | ||||||
|---|---|---|---|---|---|---|---|
| Amount in SEK, millions | Q3 2011 | Q3 2010 | Q4 2010 | Q1 2011 | Q2 2011 | 2011 | 2010 |
| Net Sales | 75,4 | 67,6 | 88,1 | 66,6 | 72,2 | 214,2 | 199,6 |
| Gross earnings | 49,6 | 41,3 | 52,0 | 38,5 | 44,2 | 132,3 | 128,5 |
| Gross margin | 65,9% | 61,1% | 59,0% | 57,8% | 61,2% | 61,8% | 64,4% |
| Operating earnings | 15,5 | 9,2 | 15,7 | 2,9 | 8,3 | 26,7 | 27,4 |
| Operating margin | 20,6% | 13,6% | 17,8% | 4,4% | 11,5% | 12,5% | 13,7% |
| Pretax profit | 17,0 | 9,6 | 16,3 | 3,8 | 9,7 | 30,5 | 27,3 |
| Net income | 14,3 | 11,1 | 19,0 | 4,7 | 9,3 | 28,3 | 83,8 |
| Net margin | 19,0% | 16,4% | 21,6% | 7,1% | 12,9% | 13,2% | 42,0% |
| Q3 | Q3 | Jan-Sep | Jan-Sep Q4'10-Q3'11 | Full Year | ||
|---|---|---|---|---|---|---|
| Amount in SEK thousands | 2011 | 2010 | 2011 | 2010 | 12 months | 2010 |
| Net Sales | 94 468 | 87 089 | 277 692 | 243 069 | 384 482 | 349 859 |
| Cost of goods & services sold | -44 585 | -45 495 | -136 187 | -118 292 | -195 126 | -177 231 |
| Gross earnings | 49 883 | 41 594 | 141 505 | 124 777 | 189 356 | 172 628 |
| Sales and marketing expenses | -19 030 | -21 339 | -56 744 | -69 626 | -79 992 | -92 874 |
| Administration expenses | -9 495 | -4 826 | -29 081 | -15 105 | -34 233 | -20 257 |
| Development expenses | -4 422 | -4 914 | -16 390 | -15 594 | -22 942 | -22 146 |
| Operating earnings | 16 936 | 10 515 | 39 290 | 24 452 | 52 188 | 37 350 |
| Net financial items | 1 148 | 240 | 2 868 | -249 | -212 191 | -215 308 |
| Earnings before tax | 18 084 | 10 755 | 42 158 | 24 203 | -160 003 | -177 958 |
| Tax | -2 959 | 10 614 | -5 241 | 188 753 | -1 749 | 192 245 |
| Net income | 15 125 | 21 369 | 36 917 | 212 956 | -161 752 | 14 286 |
| Amount in SEK thousands | Sep 30, 2011 Sep 30, 2010 Dec 31, 2010 | ||
|---|---|---|---|
| ASSETS | |||
| Intangible assets | |||
| Capitalized expenditure for development | 147 457 | 115 893 | 121 600 |
| Other intangible assets | 1 507 | 2 372 | 2 156 |
| Tangible fixed assets | |||
| Equipment | 3 754 | 1 702 | 1 702 |
| Equipment for leasing | 0 | 238 | 0 |
| Financial assets | |||
| Shares in group companies | 18 398 | 18 398 | 18 398 |
| Deferred tax asset | 216 824 | 218 573 | 25 580 |
| Deposits paid, long-term | 340 | 365 | 339 |
| Total fixed assets | 388 280 | 357 541 | 169 774 |
| Current assets | |||
| Inventory | 37 123 | 24 894 | 28 228 |
| Customer receivables | 111 166 | 109 046 | 98 430 |
| receivables, subsidiaries | 613 194 | 56 199 | 533 937 |
| Other receivables | 12 071 | 10 054 | 11 501 |
| Cash and bank balances | 130 559 | 135 141 | 167 650 |
| Total current assets | 904 113 | 335 334 | 839 746 |
| Total assets | 1 292 393 | 692 875 | 1 009 520 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Shareholders' equity | |||
| Restricted shareholders' equity | |||
| Share capital | 15 597 | 15 597 | 15 597 |
| Other contributed capital | 112 822 | 302 888 | 112 822 |
| Non-restricted equity/Accumulated deficit | 802 174 | 221 767 | 764 449 |
| Total shareholders' equity | 930 593 | 540 252 | 892 868 |
| Long-term liabilities | |||
| Long-term liabilities | 0 | 229 | 0 |
| Other provisions | 5 511 | 6 468 | 4 509 |
| Total long-term liabilities | 5 511 | 6 697 | 4 509 |
| Current liabilities | |||
| Current tax | 196 485 | 0 | 0 |
| Accounts payable | 14 646 | 26 258 | 32 640 |
| Liabilitis, subsidiaries | 98 483 | 77 831 | 29 398 |
| Other liabilities | 46 675 | 41 837 | 50 105 |
| Total current liabilities | 356 289 | 145 926 | 112 143 |
| Total liabilities and equity | 1 292 393 | 692 875 | 1 009 520 |
This interim report has been prepared in accordance with IAS 34 Interim financial Reporting and applicable rules in the Annual Accounting Act. The interims report for the parent company was prepared in accordance with Chapter 9 of the Annual Accounts Act, interim report. The accounting policies applied are consistent with those of the annual financial statements for the year ended 31 December 2010, as described in those annual financial statements.
In accordance with the decision on the Annual General Meeting held on April 28th, 2011 the members of the nomination committee shall be nominated by the four largest shareholders (voting rights). In addition, the company's Chairman of the board shall be part of the nomination committee.
Net Insight's nomination committee for the 2012 Annual General Meeting consists of Lars Bergkvist (Lannebo Fonder), Clifford H. Friedman (Constellation Growth Capital), Åsa Nisell (Swedbank Robur fonds), Ramsay Brufer (Alecta) and Lars Berg (Chairman of the Net Insight Board and European Venture Partner for Constellation Growth Capital). The nomination committee appointed Lars Bergkvist (Lannebo Fonder) to serve as Chairman of the Committee.
The nomination committee's task is to present proposals to the Annual General Meeting for Chairman of the Annual General Meeting, Chairman of the Board of Directors, members of the Board of Directors and auditors, as well as fees and other remuneration to each member of the board and any remuneration for committee work and audit fees. Furthermore, the nomination committee shall make a proposal regarding the composition of the nomination committee and its tasks for the Annual General Meeting 2012.
Year-end report for 2011 17 February 2012 Interim report January – March 4 May 2012
Stockholm, October 25, 2011
Fredrik Trägårdh Chief Executive Officer
Fredrik Trägårdh, CEO Net Insight AB Tel: +46 (0) 8-685 04 00, email: [email protected]
Net Insight AB Box 42093 126 14 Stockholm Tel +46 (0) 8 685 04 00 www.netinsight.net Corporate Reg. No. 556533-4397
We have reviewed this report for the period 1 January 2011 to 30 September 2011 for Net Insight AB (publ). The board of directors and the CEO are responsible for the preparation and presentation of this interim report in accordance with IAS 34 and the Swedish Annual Accounts Act. Our responsibility is to express a conclusion on this interim report based on our review.
We conducted our review in accordance with the Swedish Standard on Review Engagements SÖG 2410, Review of Interim Report Performed by the Independent Auditor of the Entity. A review consists of making inquiries, primarily of persons responsible for financial and accounting matters, and applying analytical and other review procedures. A review is substantially less in scope than an audit conducted in accordance with International Standards on Auditing, ISA, and other generally accepted auditing standards in Sweden. The procedures performed in a review do not enable us to obtain assurance that we would become aware of all significant matters that might be identified in an audit. Accordingly, we do not express an audit opinion.
Based on our review, nothing has come to our attention that causes us to believe that the interim report is not prepared, in all material respects, in accordance with IAS 34 and the Swedish Annual Accounts Act, regarding the Group, and with the Swedish Annual Accounts Act, regarding the Parent Company.
Stockholm, October 25, 2011
ÖhrlingsPricewaterhouseCoopers
Sten Håkansson Auditor in charge
Net Insight delivers the world's most efficient and scalable transport solution for Broadcast and IP Media, Digital Terrestrial TV, Mobile TV and IPTV/CATV networks. Net Insight products truly deliver 100 percent Quality of Service with three times improvement in utilization of bandwidth for a converged transport infrastructure. Net Insights Nimbra™ platform is the industry solution for video, voice and data, reducing operational costs by 50 percent and enhancing competitiveness in delivery of existing and new media services.
More than 130 world class customers run mission critical video services over Net Insight products in over 50 countries. Net Insight is quoted on the NASDAQ OMX, Stockholm.
For more information, visit www.netinsight.net
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